Welfare Waivers: How They Really Do Water Down Work Requirements

October 29, 2012

Reform of the federal welfare system in 1996 was heralded as one of the most significant domestic achievements of the nation in modern history. With it, recipients of welfare had to show that they were on a path to self-sufficiency. The program helped facilitate that by requiring beneficiaries to go to work, search for work, or participate in training or education, says Russell Sykes, a senior fellow with the Manhattan Institute.

Since 1996, welfare caseloads have dropped by more than 50 percent.

The Temporary Assistance for Needy Families (TANF) program was created as $16.5 billion block grant program for the states.

For states to keep funding, they had to ensure that 50 percent of adults receiving assistance met work requirements.

Furthermore, TANF benefits were limited to five years in a lifetime for beneficiaries.

Assistance in job search and placement were provided by the program as well.

Under the "work-first" paradigm, states were able to let their clients keep more of their earnings before losing welfare assistance. Moreover, there was increased spending on child care and other supports like transportation and job training.

These achievements could be in jeopardy because of the Department of Health and Human Services' (HHS) announcement that it would waive certain rules to allow states to innovate in finding more effective ways in meeting the goals of TANF. The HHS announcement would undermine work rules by:

Doing away with work participation rates.

Extending periods of education and training.

Liberalizing the counting of subsidized employment.

Discouraging one-time non-assistance payments.

These waivers are unnecessary considering that states already have flexibility to deliver federal funds how they see fit. For instance, states have leeway to reduce their 50 percent work participation rate. Instead, there are many actions policymakers should take to reform welfare, which start with the reauthorization of the program and its emphasis on work requirements.